Anonymous
Anonymous asked in Business & FinancePersonal Finance · 4 weeks ago

What percentage of ones savings should they spend on a car?

18 years old, 30k in savings, no debt, employed

Update:

I was thinking about purchasing a used car.. max $5k

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  • Anonymous
    4 weeks ago
    Favourite answer

    It isn't really about what percent to spend.  It is more about having enough savings remaining to cover yourself if needed for an emergency.  A "good" amount to keep in savings is enough money to cover all  your expenses for at least six months if you would suddenly have a loss in income from the loss of a job.  (or an investment crash).  So - decide how much money you would need to live on for six months and make sure you keep at least that much in savings.  

    It is more about being able to get a decent vehicle at a decent price that isn't going to fall apart when you drive it off the lot.  Search for a vehicle with low mileage that is a little older.  Older vehicles go down in value just because of their age - and every now and then - you can find one that was owned by someone who rarely drove and the mileage will be very low even though the vehicle is slightly older.  This makes the cost cheaper and the cost of insurance will usually also be cheaper.

    So - take your time.  Search for a low mileage - older vehicle - and then pay cash.  Research the Kelly Blue Book value before making a final choice.

    (and $5K to $7K should get you a decent low mileage vehicle - especially if you can find an older one with low mileage.)

  • 4 weeks ago

    You can get a very good used car for under $10,000 that will last for years. {But in reality, you should also strongly consider your monthly income and cash flow.}

  • 4 weeks ago

    keeping money in the bank without investing it is the stupidest thing anyone can do. buying a car is  NOT  investing. if u re employed u should buy a property as an investment if u do not know how to play the market

  • 4 weeks ago

    Have you paid taxes on the $30000?

    Do you have any expenses?

    It's much easier to save money when you aren't supporting yourself &/or you are working as an independent contractor and haven't paid taxes yet.

    Without knowing your full situation, it's difficult to say what you should do.

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  • 4 weeks ago

    At 18 one does not generally have savings of any sort, let alone $30k.  Perhaps one should ask momsie and dadsie what they think is an appropriate amount to spend on a car.  Fairly toink.

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